The Acting Secretary of State to the Ambassador in Brazil (Berle)
522. Department and Army greatly appreciate efforts of Embassy and Brazilian officials leading to agreement by the Brazilian Government to supply 1,000,000 bags of coffee to the Army. This alone is not sufficient to correct the present very unsatisfactory general coffee situation in this country, however, and it is hoped that some plan may be announced by the Brazilian Government during the present coffee convention57 that will assure the sale of a satisfactory volume of civilian coffee.
The Army will need to purchase approximately 4 million bags of coffee during the present calendar year. At this rate approximately 650,000 bags of Army coffee will have been used between the time the question of supplying additional coffee for the Army was raised with the Brazilian Government in the early part of January and the time the first installment of the million bags is to be sold in March.
Civilian stocks in this country have declined every month from the very satisfactory levels of last July. Boastings are at the highest rate in history, having approximated 1,750,000 bags in January. Stocks at the end of January were approximately 4,100,000 bags, considered by the War Food Administration to be about the minimum safe operating inventory. Sales during February for civilian consumption reported to the War Food Administration through the 23rd were only slightly in excess of 300,000 bags. Sales of Brazilian coffee for civilian consumption have virtually dried up. The outlook is therefore grave.
The only possibility of relieving this situation is through greatly increased sales by the producing countries at the present ceiling prices. It is requested that the Embassy point this out to the Brazilian authorities for their consideration in connection with any plans [Page 692] they may now have under consideration for coffee. The strongest possible assurances should be given that the price ceilings in this country will not be raised.
For the Embassy’s secret information the Department is certain … that the Brazilian delegate to the Coffee Board has not impressed the immediately foregoing point sufficiently on the Brazilian authorities. On the contrary, he has constantly held out to them the hope of a price increase in spite of all efforts of the Department and other agencies of the Government to impress upon him and the other representatives of the producing countries the fact that the price decision is to remain unchanged.
[Efforts to arrange for procurement and shipment of additional supplies of coffee continued until August 13, when in telegram 1985 the Department of State informed the Ambassador in Brazil (Berle) that as a result of the “apparent imminence” of peace the Army’s need for coffee was being revised and that the Quartermaster General requested that negotiations for 600,000 remaining bags be deferred until further notice (811.244/8–1045).]
- Reference, apparently, is to the Brazilian Interstate Coffee Convention which met February–March 1945, and indicated support for Government subsidies and interest-free loans for the coffee industry.↩